The Methods to Estimate of Value of Tangible Fixed Assets

February 26, 2003

In estimating tangible fixed assets (real assets), we have selected houses, residential land and major durable goods etc. as the objects of estimation and have estimated their gross values and net values as of the end of November 1999. Total net value of assets is sum of financial assets (savings minus liabilities) and estimated net values of tangible fixed assets.

1. Estimation methods for houses

(1) Objects of estimation

a. Households having their own houses ? ? ? ?Owned houses for the households (the present residence and other than the present residence)

b. Households renting houses and rooms ? ? ? ?Owned houses for the households other than the present residence

Construction cost ? ? ? ? Calculated on the basis of planned construction costs and the floor areas of buildings for dwelling as shown in the Survey of Construction Work Started (1999) which compiled by Ministry of Construction.

b. Estimation method for net value Estimated gross value (calculated by the above-mentioned method) * Remaining ratio by structures of dwelling and time of construction

p: Depreciation ratio estimated by constant ratio method which brings the remaining ratio to 10% at the time when the durable year has passed (stipulated in the Ministerial Order Concerning Durable Years of Depreciable Assets (Ordinance No.15, 1965, Ministry of Finance))

n: Elapsed years from the time of construction

2. Estimation methods for residential land

(1) Objects of estimation

a. Households having their own houses ? ? ? ?Owned residential land for the households (the present residence (including rented land) and other than the present residence)

b. Households renting houses and rooms ? ? ? ?Owned residential land for the households other than the present residence

Note: Residential land means the residential land recorded in the resister and owned land to construct houses

(2) Estimation methods

a. Estimation method for the present residence (residential land)

Owned land: Land area of dwelling houses (square meter) * Cost of the residential land per square meter

Rented land: Land area of dwelling houses (square meter) * Cost of the residential land per square meter * Proportion of leasehold (0.5 or 0.6)

Cost of the residential land ? ? ? ?Estimated value per square meter of the standard places noted in "Publication of Land Price" or the representative lands noted in the "Prefectural Land Price Survey" by National Land Agency that is nearest to each surveyed unit area.

Proportion of leasehold ? ? ? ?Where the house is an owned house and the residential land is a rented land, the proportion of leasehold is 0.5 when the structure of the dwelling is "wooden, wooden with fire proof, block or others" or 0.6 when the structure of the dwelling is "ferroconcrete".

b. Estimation method for residential land other than the present residence Land area of dwelling houses (square meter) * Cost of the residential land per square meter

Cost of the residential land ? ? ? ?Estimated value per square meter by cities, wards, towns and villages, calculated using the estimated values of the standard places noted in "Publication of Land Price" and the representative lands noted in the "Prefectural Land Price Survey" by National Land Agency. (Because the entry of the addresses was on the basis of only the names of cities, wards, towns or villages, the estimated values were the medians by cities, wards, towns or villages which were calculated by sampling the "residential districts, prospective residential districts and the present residential land within the urbanization promotion areas" from the districts and areas noted in the "Publication of Land Prices" and the "Prefectural Land Price Survey".)

3. Estimation methods for major durable goods etc.

(1) Objects of estimation: The following durable goods etc. owned by the surveyed households

a. Principal durable goods ? ? ? ?In principal, the goods whose purchases price is 10,000 yen and over and durable year is 5 years and longer

(2) Estimation methods

Unit price by items ? ? ? ? (a) Unit prices of furniture and electric appliances were the simple average by items using the purchased quantities and expenditure of fixed items of the National Survey of Family Income and Expenditure from the data that contained in the family account books of the Family Income and Expenditure Survey in the most recent year (from April 1998 to March 1999). For the items that this method is not applicable (unit furniture, Japanese-style tables, shampoo dressers etc.), their unit prices were estimated by selling prices which is collected information from markets and retail stores. ? ? ? ? (b) Unit prices of cars, motorcycles and scooters were the weighted average using the delivery prices of new cars over the counter in Tokyo in November 1999 and number of new car's registration by the places of production (home products or imports), trade name and displacement as the weight (but the simple average for motorcycles and scooters). ? ? ? ? (c) Unit prices of golf membership entitlements, etc. and other durable goods were the market prices or purchase prices which recorded in the questionnaire.

b. Estimation method for net value

Quantities by items and year of acquisition * Unit price by items * Remaining ratio by items and year of acquisition

Remaining ratio? ? ? ?The same method as that noted in "1. Estimation methods for houses" was used. In furniture and electric appliances, in case of the years of acquisition are "passed 1 ~ 5 years" and "passed 5 years or more", and items not surveyed the years of acquisition, remaining ratio of those was estimated by average remaining ratio by item of durable goods calculated from 1989 National Survey of Family Income and Expenditure, or by number of purchase households for durable goods surveyed by Current Consumption Survey which compiled by Economic Planning Agency, or other methods.